Is it better to take Social Security at 62, 67, or 70?

Choosing the right time to begin receiving Social Security retirement benefits can significantly affect your financial future.

To make an informed decision, understanding how your benefits will change depending on when you start receiving them is essential.

In this article, we’ll explore the pros and cons of claiming Social Security at 62, 67, and 70, helping you to navigate this crucial decision.

Social Security benefits at age 62:

For most people, the earliest age they can begin claiming Social Security retirement benefits is 62. However, opting for early retirement comes with a significant downside: your monthly benefit is reduced.

Individuals who retire at 62 typically receive only 70% of their full benefit amount, which can mean a substantial decrease in your income for the rest of your life.

While some may find it necessary to take the reduced benefits due to immediate financial needs, it’s important to consider whether this option is right for you.

If you choose to retire at 62, you’ll miss out on five years of receiving higher benefits, which can impact your long-term financial stability.

Social Security benefits at age 67:

If you were born in 1960 or later, your full retirement age is 67. At this age, you are entitled to 100% of your Social Security benefits.

Choosing to start at 67 means you will not face a reduction in your payments, but the catch is that you forgo the opportunity to receive benefits for an additional five years.

At 67, you also have the benefit of not having to worry about earning limits, as you would at 62.

If you continue working, your Social Security payments will no longer be reduced based on your earnings. If you can afford to delay receiving your benefits until 67, this may be the optimal choice.

Social Security benefits at age 70:

Waiting until age 70 to claim Social Security can lead to the largest monthly payments. The Social Security Administration offers an 8% annual increase for each year you delay your benefits beyond your full retirement age. As a result, at age 70, you can receive up to 124% of your full benefit amount.

Choosing to delay benefits until 70 can be advantageous if you expect to live a long life. By waiting, you maximize the monthly payment you will receive, which could be critical if you anticipate a longer retirement period.

However, it’s important to note that once you reach 70, delaying further will not increase your payments.

Important Factors to Consider:

To help you determine the best age to begin receiving your Social Security benefits, here are some key factors to consider:

What is your break-even point?

The decision to delay Social Security benefits is not always straightforward. Even though delaying might offer larger monthly payments, you need to evaluate your break-even point.

This is the age at which the total amount of Social Security you would receive by waiting exceeds what you would have gotten by starting at 62.

For example, if you’re entitled to $1,500 per month at 67, but you take your benefits at 62 and only receive $1,050 per month, the cumulative amount you lose by waiting is $63,000.

However, by waiting until age 67, you will gain an additional $450 per month for life. It’s important to calculate the point at which this additional monthly amount makes up for the lost income.

What is your life expectancy?

If you anticipate living a long time, it may make sense to wait and claim Social Security at a later age.

Delaying benefits allows you to receive a higher monthly payment, which can be beneficial over the long term. However, if you expect a shorter lifespan or have health concerns, starting benefits earlier may make more sense.

Are you still working?

If you’re still working and haven’t reached full retirement age, your Social Security benefits could be reduced if you earn more than a certain amount.

For 2024, if you earn over $22,320, your benefits will be temporarily reduced. However, once you reach full retirement age at 67, there will be no earnings limit, and your payments will not be reduced based on your income.

Are other family members eligible for benefits?

If you have a spouse or dependent children, they may also be eligible to receive benefits based on your Social Security record.

However, they cannot begin receiving these benefits until you start taking your retirement benefits. In this case, claiming benefits earlier may benefit your household overall, even if it means a smaller monthly payment for you.

How much Social Security will you get at 62?

At age 62, the average Social Security payment for retired workers is $1,274.87. However, because benefits are reduced at this age, retirees typically receive only 70% of their full retirement benefit.

While this can be useful for individuals who need the funds immediately or have other financial concerns, it’s crucial to weigh the long-term impact of starting early.

When might it make sense to take social security at 62?

There are several circumstances where claiming Social Security at 62 may be a reasonable option:

• You need the money immediately.
• You have health issues or other reasons to believe you won’t live past the break-even point.
• You are eligible for early retirement from your employer, and those benefits end at age 62.
• You have dependent children or a spouse who can receive benefits based on your Social Security record.

How much Social Security Will you get at 67?

At 67, the average monthly benefit for retired workers is $1,844.83. Individuals who begin receiving benefits at this age are entitled to 100% of their full benefit.

This is typically a balanced choice for those who want to begin receiving benefits but have not yet reached the need for the higher payments at 70.

When might it make sense to take social security at 67?

There are several reasons why 67 may be the right time to start collecting Social Security:

• You plan to continue working after claiming benefits, and you no longer need to worry about earning limits.
• You have delayed taking benefits to this point but cannot afford to forgo further income.
• You don’t anticipate living long enough to benefit significantly from the larger payments at 70.

How much Social Security will you get at 70?

At 70, the average Social Security payment is $1,963.48 per month. People who retire at 70 receive 124% of their full benefits.

This can be the optimal choice if you expect to live a long life and do not need the income earlier.

When might it make sense to take social security at 70?

Waiting until 70 can be beneficial in several scenarios:

• You have other sources of income and do not need the benefits before 70.
• You expect to live a long life and want to maximize your monthly payments.
• You understand that no further increases will be made once you reach 70.

Deciding when to start taking Social Security benefits is a personal decision that depends on various factors, including your health, life expectancy, financial situation, and family circumstances.

Whether you choose to take benefits at 62, 67, or 70, each option has its advantages and drawbacks.